How far will the Obama Administration go to impose racial lending quotas for banks? Far enough to lean on St. Paul, Minnesota to deny the Supreme Court the chance to rule on whether the government’s actions are legal.

[The plaintiff-landlord] did not respond to requests for comment, but his lawyers have argued in court that he and other inner-city landlords were targeted for aggressive code enforcement primarily because they rent to low-income and minority tenants in aging neighborhoods that some would rather see gentrified. His lead attorney, John Shoemaker, said the effect of the city crackdown was to shut down properties, increase costs and limit the supply of affordable housing in the Twin Cities.

There is a lively discussion of this on Ademocracy, a St Paul based political blog. If you are interested in the case, you should peruse that discussion

After reading the amici briefs it was clear that St Paul could not be allowed to win at the Supreme Court. To have won would have undone 40 years of Fair Housing and Equal Rights legislation and court cases. I’m pretty sure someone smarter than St Paul’s current legal staff sat them down and explained all of this to them.

St. Paul now boasts that “it will be successful in defending its code enforcement actions in any court”

Hmm, if that is so then why did St Paul try so hard to avoid trial by going to the US Supreme Court after a Court of Appeals decision to let the case go forward? Remember that this case is in its eight or ninth year and has already had a major impact on St Paul’s budget.

If you have been a reader for a while you are aware of the St Paul landlords’ case against their city’s code enforcement department. The case is now at the US Supreme Court. Here are a few updates and articles:

The following article is from RoofLines

At issue in the case, Magner v. Gallagher, is whether the Fair Housing Act prohibits the full range of discrimination in housing that many Americans still face in the 21st Century.

The case comes out of St. Paul, Minnesota, where a group of landlords who rent affordable homes to racially diverse tenants say the city is driving them and their tenants out of town in favor of less affordable and less diverse owner-occupied housing. The Supreme Court took the case to decide, not whether these facts are true but, rather, assuming they are true, whether the city’s alleged conduct violates the Fair Housing Act absent proof that the city purposefully intended to exclude people of color from its borders.

This case arises from the City’s adoption of a policy to nonetheless limit its stock of private low-income housing, including by forcing respondents to abandon or sell the housing they provided, in favor of owner-occupied housing. The City pursued that specific policy through the selective and often illegal application of its housing code in a manner designed to produce the closure or abandonment of private low-income rental properties either directly, through condemnation, or indirectly, by rendering the maintenance of the properties uneconomical.

The City’s actions included targeting respondents’ properties for “code to the max” and “forced sale” treatment, falsely labeling those properties as “problem” and “distressed” housing, charging those properties with false code violations, failing to provide respondents with timely notice of claimed code violations, and condemning the properties without a sufficient basis.

It is a sad reality that many communities use code enforcement to promote an illegal racially motivated agenda. The ACLU outlines their view of the problem in an article, Renting While Black.

We see it here in Milwaukee where at least one Alderman appears to use Aldermanic Service Requests in a way that only the ku klux klan would be proud of.

Even if so called community leaders are not actively involved in the racially motivated inspections, a complaint based code enforcement that permits anonymous exterior complaints opens the door for neighbors to promote their biases through code enforcement

Typically if a case gets to the point that the property owners may win the municipality quickly and quietly settles. Usually not for the full compensation for the harm caused by the racially motivated enforcement. But lets face it, it takes a lot of financial and mental tenacity for a small landlord to slug it out against cities with seemingly endless resources to defend their bad behavior.

If the Supreme Court hears this case it will have a huge impact on all landlords who follow fair housing practices, i.e. don’t reject tenants tenants simply because they are a different color, nationality, religion, etc than their neighbors. One must really respect these property owners for the amount of sacrifice they have made to get this far.

The case alleges that St Paul housing inspection programs were used in a racially motivated manner to force racial minorities out of St Paul and that such actions violated the Fair Housing rights of the occupants. A very interesting point is a number of city employees including inspectors are on the hook personally in this suit. From a legal perspective they must defend themselves as they and their employer have disparate interest; for the city to win if the allegations are proven true they must claim rogue employees acting outside of the law. For the inspectors to win they must argue that they were following instructions that they believed were legal. The inspectors may have a hard time claiming ignorance however as the owners had provided the inspectors with documentation that the inspectors’ acts were contrary to Fair Housing, yet the inspectors continued with their agenda. At some point the inspectors will have to name their union as third party defendants as the union failed to stop management from allowing/forcing them to violate the rights of the tenants and owners

From my conversations with two of the plaintiffs over the past six or seven years they seem to be just a handful of hard working landlords who independently found themselves on the losing end of government behaving badly. The current case is a consolidation of three or four cases that started independent of each other, but the claims were so similar that the federal court combined them.

Most of the cases claimed RICO (racketeering) on the part of the city employees. The RICO elements were dismissed due to procedural errors. I’m certain that some future case will go to trial on that issue, whether in St Paul or somewhere else.

The Eight Circuit Court of Appeals has once again ruled in favor of the suit brought by landlords against the City of St Paul going to trial.

This is the case where the allegation is the City of St Paul is using their building inspection powers to drive low income minorities from the city by over aggressive inspection efforts aimed at closing the buildings occupied by minorities.

Disclaimer

I am "just a landlord," NOT an attorney or accountant. If you need legal advice, tax advice or have appendicitis, don’t rely on something you read on the internet and do it yourself. Rather, hire a competent professional.